US stocks flat as data points to sluggish recovery

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NEW YORK – Wall Street finished a positive week on a tepid note, ending little changed following mixed on US retail sales and industrial production.

The Dow Jones Industrial Average ended the session up 0.1 per cent at 27,931.02, concluding a winning week for the blue-chip index and the other two major US stock indices.

The broad-based S&P 500 was essentially at 3,372.85, while the tech-rich Nasdaq Composite Index shed 0.2 per cent to 11,019.30.

Retail sales increased 1.2 per cent last month compared to June, a more modest rise than economists had been expecting, held down by a decline in auto sales, according to government data.

Industrial production rose 3.0 percent in July, the third consecutive monthly increase but a slower gain than in June, the Federal Reserve said.

Despite the mediocre data and broad expectations that unemployment will remain at high levels for some time as the US struggles to contain the coronavirus, the S&P 500 and Nasdaq stand near all-time highs.

“The in equity markets has been stunning, partly reflecting the huge amount of stimulus that has been unleashed,” said a note in Oxford Economics.

“However, a further deterioration in the health situation or the absence of additional fiscal support are two key downside risks that are likely not fully discounted.”

The Oxford Economics note warned that Washington’s failure to approve a new stimulus package “will minimise chances of a sustained economic rebound.” President Donald Trump told reporters Friday he remains steadfast in opposing a spending package that would include help for ailing cities and states.

“They want US$1 trillion to go to their friends doing a bad job running certain cities and states that are doing very badly,” Trump said, adding that Democrats are to blame for the impasse. US$1 trillion is equivalent to S$1.3 trillion.

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